Fortune’s quarterly investment package came out this week and it’s filled with stories about tech.
That’s probably not surprising given that tech stocks have been surging for a while now. The S&P 500’s tech sector gained 44% last year versus 18% for the overall index. Collectively, the big six–Apple, Microsoft, Amazon, Google, Tesla, and Facebook–are now worth over $8 trillion. To some it’s an obvious bubble, to others a logical response to the winners of the year of COVID.
With tech’s big sway in the stock market, I’m benefitting indirectly and so are you, most likely. All of my investments are in mutual funds, mainly low-cost index funds, and they’re topped up with the big six and other tech high-flyers.
Well, not exactly all of my investments. About two months ago, I was using the PayPal app to pay for something or other, probably a bag of coffee beans I saw on Instagram, when I noticed that the company’s promised digital currency exchange had gone live. Right from the app, with a just a few taps, I could buy and sell Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. This new level of exposure to the general public and ease in buying seemed likely to push prices higher, I reasoned. So I bought a small mixed basket of crypto…and watched it start to go up.
A week in, I was bragging to the family about my success and noting that the power of compounding my 10% gain–if annualized over a whole year–would make us rich. I was prompted to put slightly more money at play, say enough to buy a family of five dinner at one of Boston’s finest restaurants with drinks, dessert, and a healthy tip.
PayPal must be thrilled with the response to its crypto addition, because I started checking the app at least once a day. And off to the races we went. At the recent peak of Bitcoin’s price of almost $42,000 at the beginning of January, I was close to tripling my investment.
Money aside, this was more about entertainment and bragging rights than a serious foray in digital currencies, an offshoot of how fellow newsletter scribe Matt Levine calls the stock market a “fun casino.” So I had no interest in selling. Bitcoin’s recent drop has hit my PayPal casino of fun too. I’ve now only doubled my money. Maybe I should have listened to astrologer/bitcoin strategist Maren Altman?
Among more serious investors remains the more serious question: Should you add Bitcoin to your portfolio in 2021? As one of the best journalists out there covering crypto, Robert was on the case for another story in our investing package.
There has long been a strategy for investing in assets that will thrive in bad times. When all your stocks are going down, Treasury bonds, foreign currencies, and gold can provide you with a safety cushion. Could bitcoin do the same? Is the ultimately capped number of total bitcoins that can ever be mined a hedge against the Federal Reserve’s seemingly infinite ability to mint more dollars? Robert offers both sides of the debate, though a recent analysis by JPMorgan Chase strategists John Normand and Federico Manicardi came down firmly with the skeptics. Bitcoin is the “least reliable hedge during periods of acute market stress,” they wrote, alas.
Still, I have a pretty great seat in the fun casino. Have some fun this weekend and we’ll see you here Monday.
Aaron Pressman
@ampressman
aaron.pressman@fortune.com
Next Wednesday, January 27, at 11 a.m. ET, Fortune is hosting a CIO roundtable on the topic of COVID and the cloud, accelerating the conversion and finding value, with Accenture CIO Penelope Prett and Zoom Global CIO Harry Moseley. The event is by invitation only and we are almost at capacity, but you can sign up for consideration.
NEWSWORTHY
All we need is a little more elevation. While you're thinking about inflating bubbles, shed a tear for Google's balloon Internet project, Loon. Since creating its holding company structure topped by Alphabet, the company has been getting stricter with its X unit's "moon shot" offshoots. This week, the air came out of the Loon balloon. With funding running low, “no one wanted to pick up the mantle,” Astro Teller, the rollerblading chairman of Loon and head of the X division, tells Wired.
In and out of the blue. Speaking of Google, the standoff between the company and Australian lawmakers is escalating. At a hearing over a proposed law to force Google and Facebook to pay more to publishers, Mel Silva, managing director for Australia and New Zealand, called the plan an “untenable financial and operational precedent,” adding: “If this version of the code were to become law, it would give us no real choice but to stop making Google Search available in Australia."
Kurt Cobain is all in my face. On Wall Street, two stocks that have been left out of tech's rally reported earnings that were more about promises than results. Intel said its fourth quarter sales got a boost from the COVID home PC boom, while more lucrative sales to cloud providers and corporate servers dropped. New CEO Pat Gelsinger says he's getting excited about chips to come. Intel shares, up just 3% over the past year, are down 5% in pre-market trading on Friday. Similarly, IBM reported revenue fell 6% while CEO Arvind Krishna offered visions of a brighter tomorrow. IBM shares, down 5% over the past year, dropped another 8% in pre-market trading.
Come meet me in the sky. The world's richest man may be realizing that getting to Mars is harder than he anticipated. Tesla and SpaceX CEO Elon Musk tweeted Thursday that he plans to offer $100 million prize for the development of carbon capture technologies, a possible weapon against climate change. More details to come, he promised. Maybe he'll be able to visit Mars virtually soon: Apple is working on an expensive VR headset similar to Facebook's Oculus gear, Bloomberg reports.
What happens if I go through that door. Right-wing Twitter clone Parler failed to get a judge to force Amazon to restore its online hosting of the platform. Only partially enabled via a Russian-owned hosting service since the Amazon cutoff, Parler has alleged a political conspiracy to favor Twitter. "Parler has submitted no evidence that AWS and Twitter acted together intentionally–or even at all–in restraint of trade,” District Judge Barbara Rothstein wrote. A trial will proceed.
(Today's headline reference video explainer in honor of the demise of Loon comes courtesy of the great Lily Allen.)
FOOD FOR THOUGHT
One thing keeping some people from ever switching from an iPhone to an Android phone is Apple's iMessage app. But maybe developer and entrepreneur Eric Migicovsky has a workaround with his new multi-platform messaging app called Beeper, as he explains to The Verge's Jon Porter.
iMessage is only officially available on Apple devices, and it’s often cited by users as something that prevents them switching to Android. Migicovsky says Beeper should allow iMessage to work on Android, Windows, and Linux, but admits that it’s “using some trickery” in doing so.
An FAQ on Beeper’s website gives a more in-depth explanation of exactly what this trickery involves. If you’ve got an always-online Mac, then you can install the Beeper Mac app to act as a bridge, similar to the approach AirMessage uses. But things get really wild if you don’t have access to a Mac, at which point Beeper says it’ll literally send each of its users a “Jailbroken iPhone with the Beeper app installed” in order to act as a bridge. At this point we should probably mention that using Beeper involves paying a $10 a month subscription, which may or may not include the cost of the iPhone.
FOR YOUR WEEKEND READING PLEASURE
A few great long reads I came across this week:
How Volkswagen’s $50 Billion Plan to Beat Tesla Short-Circuited (Wall Street Journal)
Faulty software set back a bid by the world’s largest car maker for electric-vehicle dominance.
An Oral History of Wikipedia, the Web’s Encyclopedia (OneZero)
It’s hard to imagine the internet without Wikipedia. Just like the air we breathe, the definitive digital encyclopedia is the default resource for everything and everyone — from Google’s search bar to undergrad students embarking on research papers.
Palantir’s God’s-Eye View of Afghanistan (Wired)
The company’s software can sift through enormous amounts of data, and those metrics can be used to make life-or-death decisions.
A Plague of Madness (The Ringer)
Twenty-five years ago, Terry Gilliam and the other outsider creators of ‘12 Monkeys’ gave humanity a warning about our pandemic-filled future, whether they meant to or not.
IN CASE YOU MISSED IT
Facebook passes the buck on decision to ban Trump to its new Oversight Board By Danielle Abril
Samsung Galaxy S21 Review: Less is more By Aaron Pressman
8 tech stocks to buy for 2021 By Anne Sraders
How will the pandemic reshape corporate travel? By Lucinda Shen
Goldman reveals first look at new Marcus Invest platform By Rey Mashayekhi
We’re Columbia students going on a tuition strike. Here’s why By Townesend Nelson
(Some of these stories require a subscription to access. Thank you for supporting our journalism.)
BEFORE YOU GO
Have you caught any of the Bernie Sanders-in-mittens memes yet? I have been guffawing every five minutes since people started pasting pictures of the Vermont senator, sitting at the Biden inauguration ceremony in a pair of giant hand warmers, into other scenes with clever captions. He's with Churchill (combining an old meme with the new), he's taking a break with steel workers, he's on the subway after a Knicks game.
It's also been a great marketing campaign for the mitten maker, Vermont teacher Jen Ellis, who knits them with wool from recycled sweaters and fleece made from old plastic bottles. They are totally sold out at this point, Ellis says, as is most of the instant merch that popped up like mugs, sweatshirts, and bobble-head dolls. Call it the Bernie bubble?
